Visual processing abnormalities in schizophrenia (SZ) are pervasive, seen in a variety of paradigms, and typically large in magnitude. Despite their informative value, these impairments have received far less research attention than impairments associated with frontal and temporal cortical systems. Visual processing paradigms often have well-established neural bases and provide a direct way to investigate neural functioning in SZ. Partly as a result of reduced research emphasis there are fundamental gaps in our knowledge. One such gap is the absence of an integrated theory that satisfactorily explains the patterns of findings across the range of visual processing measures. A second is that we do not know the degree to which visual processing impairment extends across diagnoses for chronic mental illness, including SZ and bipolar disorder (BD). Although abnormalities in visual processing have been found in BD, few attempts have been made to examine performance in BD in a detailed manner across visual processing stages. The current application will test a theory of a core process that might help explain the range of visual processing impairment observed in SZ and BD. We hypothesize that an array of findings from our laboratory, and others, might be explained most parsimoniously as an abnormality in the tuning of neurons for object features (i.e., neurons are less able to generate specific neural responses to preferred visual objects versus visually similar objects; referred to as visual tuning). Visual processing for objects or object features occurs in the lateral occipital complex (LO). Although the literature on visual processing abnormalities in BD is smaller than that in SZ, such impairments have been found. The current application will evaluate whether such deficits in BD also stem from problems in visual tuning. The proposed study will recruit 90 SZ patients, 90 BD patients and 90 healthy controls that will be group- matched on key demographic variables. The subjects will participate in perceptual performance, electrophysiological (EEG), cognition, and functional magnetic resonance imaging (fMRI) procedures to address the following three aims: 1) To examine visual neural tuning in SZ using specialized EEG and fMRI methods; 2) To examine visual neural tuning cross-diagnostically among SZ, BD, and healthy controls with specialized EEG and fMRI methods; and 3) To examine the implications of visual tuning deficits in SZ, BD, and healthy controls, including perception, higher-level cognition, and functioning. This program of research is consistent with several components of the NIMH Strategic Plan and the NIMH Research Domain Criteria project. Results from this research program will lead to information on the similarities and differences in visual processing between SZ and BD, and the underlying neural substrates of visual processing impairment in these conditions. Visual tuning is modifiable and can be reliably assessed in humans and animals, so this information will have implications for treatment development.